Deduction u/s 80 I C

[Dharmender Batra]

The assessee has taken the claim 100% in first five years in Himachal pradesh. Now he has done substantial expansion. Can he claim 100% deduction for next 5 years or it will be restricted to 25% of profit only

AI Summary

Section 80 IC: No Reset of 10-Year Tax Deduction Period Post-Expansion; 100% for 5 Years, Then 25% Only. An inquiry was made regarding the applicability of Section 80 IC of the Income Tax Act, specifically whether an assessee in Himachal Pradesh, who claimed a 100% deduction for the first five years and then undertook substantial expansion, can continue to claim a 100% deduction for the next five years. The responses clarified that the total exemption period under Section 80 IC is 10 years, with 100% deduction for the first five years and 25% for the subsequent five years. Expansion does not reset the exemption period, and the deduction is limited to 25% for the remaining five years post-expansion.